San Francisco stands to profit from port bill

Elliot Zaret, STATES NEWS SERVICE

Published 4:00 am, Wednesday, October 22, 1997

1997-10-22 04:00:00 PDT SAN FRANCISCO -- WASHINGTON - San Francisco Bay, with its breathtaking views of the Golden Gate Bridge and Alcatraz, seems as if it would be a perfect starting point for tourists to board cruises to Hawaii or along the Pacific Coast.

But a 111-year-old law - originally designed to protect U.S. ferry operators on the Great Lakes from Canadian competition - could be keeping cruise lines from using San Francisco and other U.S. cities as a port. California officials estimate the Bay Area loses about $43 million annually due to the outdated law.

Tuesday, a Senate panel held its first hearings on a bill that would allow foreign cruise ships to sail between U.S. cities - something port and travel industry representatives say would be a boon to coastal cities' economies. The legislation enjoys considerable GOP support, but no Democrats have signed on, and the measure is opposed by organized labor.

The bill would amend the Passenger Services Act, written in 1886, which forces foreign ships to dock on foreign soil between stops at U.S. cities. But nearly every one of the 127 luxury cruise liners that dock at U.S. ports is foreign-flagged. Only one U.S. ship offers cruises, and it sails between the Hawaiian islands. Companies that violate the law are fined $200 per passenger and risk seizure of the vessel.

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"The Passenger Services Act today is most notable for its negative effect on our economy," said Sen. Frank Murkowski, R-Alaska, who co-authored the bill with Sen. Strom Thurmond, R-S.C. "In precluding American port cities from competing for some of the fastest-growing and most lucrative business in the maritime world, it is a form of discrimination."

Cruise ships that go between U.S. cities must be made in the United States, use a U.S. crew and fly the U.S. flag.

But since nearly all cruise liners are foreign ships, virtually no cruises can sail between U.S. cities. That that means U.S. port cities can't profit from the nearly 50 percent growth in the cruise industry over the past five years.

For San Francisco, the cruise act means the industry is limited almost entirely to cruises to Alaska, with the ship docking in Vancouver along the way. If the act were waived, cruise lines would offer shorter trips up the northern coast or down the coast to Monterey or San Diego, as well as longer trips to Hawaii, said Gerry Roybal, maritime marketing representative for the Port of San Francisco.

This opportunity would boost port calls at San Francisco from an average of 50 a year to as many as 170 annually. The overall impact would be to bring in about $43 million to The City from the added tourism, shipping jobs and supplies, as opposed to the $18 million brought in 1996, Roybal said.

The state Department of Commerce estimated that changing the law could mean $96.3 million in increased revenues statewide, 1,130 new jobs by 2003 and a 166 percent increase in port calls across the state.

"Passengers will not only disembark the ship and shop in local stores and sample the local restaurants, but they will also take land packages to the adjoining areas of interest," said Michael Spinelli, president of the American Society of Travel Agents.

Mayor Brown has lent his support to the bill, writing a letter to Sen. Dianne Feinstein, D-Calif., last spring, urging her to support the legislation.

"Short of selling Alcatraz to a foreign country, the only way that San Francisco can reach its full prominence as a cruise port is to change the PSA," Brown wrote.

Feinstein supports changing the PSA, but hasn't said how she would vote on the legislation. To win her support, the ports would have to open discussions with labor unions that oppose the bill.&lt;